“For categories where commodity inflation is fluctuating rapidly, we are following on-the-spot strategies, unlike the case earlier,” Coca-Cola India president Sanket Ray said. “Our cycles are focused on short-planning cycles, which are broken down into quarters. We have to keep space to account for volatility in demand. The system has to be agile enough in supply chain and commodity planning to take uncertainties into play.”
Company boards too are mindful of the challenges CEOs have to tackle to achieve growth.
“Boards are giving a lot of flexibility to CEOs who have been leading their companies through the pandemic, supply chain issues, employee attrition and environmental challenges to manage business targets within shorter timelines. But the good news is that growth can be achieved by constantly tweaking plans to work around uncertainties and staying agile,” said the chairman of a large Mumbai-based consumer-facing conglomerate. chairman Suresh Narayanan said: “We take our plans in ‘bite-sized portions’ because of extreme volatility and uncertainty, calibrate as circumstances change and implement in ‘bite-sized’ modules if things get very unpredictable.”
However, despite the challenges, companies are keen to tap the growth opportunities India offers.
HDFC Securities said in a report: “High level of retail inflation will continue to impact volume growth in the near term, which is being felt across rural and urban India. While there has been some easing of raw material pricing in the past one month ( palm/crude/coffee/maize down 36/14/9/4%), we expect demand to revive with a lag. Due to global uncertainties, the raw material pricing risks remain.”
Companies are aware that despite inflation and supply chain issues, India is still a growth market compared to the rest of the world. Also, organizations have to be flexible and agile and, while they have long-term goals, the targets and execution plans can no longer be the way they were done before.
“The post-Covid business environment is a dynamic and unpredictable one and organizations are cognisant of that. There is a pause, reflect and plan approach while not letting go of growth,” said the CEO of a large steel company.
India is still the fastest growing major economy even as the Ukraine conflict impacts global gross domestic product, according to a UN report. India is projected to grow 6.4% in 2022, slower than last year’s 8.8%, due to higher inflationary pressures and even recovery of the labor market curbing private consumption and investment.